UPDATEII: The New York Times told Venturebeat that its objections to the Pulse Reader have to do with the fact that it charges people to view the content and because the reader renders all the stories within the app, rather than taking them to a regular web browser. Also, the New York Times comes installed on the app and is used to promote the Pulse Reader. All of this violates the Times’ terms of use.

Diane McNulty, The Times’ executive director of media relations, said she doesn’t know why the app has been reinstated because the company’s objections have apparently not been addressed.

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Well, Apple has pulled another app but this time, it’s at the request of the New York Times, which has complained about the Pulse News Reader app.

The Times sent a letter to Apple saying the app makes inappropriate commercial use of the New York Times and Boston Globe’s RSS feed, according to Kara Swisher at AllThingsD. Basically, the $4 app takes in RSS feeds and displays them in a very slick way.

This is not unlike many other paid RSS readers. But for some reason, the app got the attention of the Times. Engadget is reporting the Times’ problem has more to do with the fact that its RSS feed is pre-loaded on the Pulse and that the Times is featured in promotional material for the reader.

Apple pulled the app yesterday and relayed the news to the makers of the Pulse Reader, two Stanford grad students. The Reader has had huge success in its four weeks in the App Store. The app has been downloaded 35,000 times and occasionally topped the sales charts.

It’s curious timing considering Steve Jobs mentioned the Pulse Reader at the Apple Worldwide Developers Keynote Monday. The New York Times ironically even wrote a positive story on the Pulse Reader last week.

Akshay Kothari and Ankit Gupta, the makers of the Pulse app, are reportedly reaching out to Apple to get their app in the store again. If it’s a matter of not pre-loading the Times and dropping the paper from its promotional material, we might see the return of the Pulse Reader soon.

But this development could spell more trouble for other paid news aggregators if the Times has a larger problem with paid RSS readers in general. We’ll have to see.